What is divestment?

Of all Positive Investment methods, divestment is the most well known.

Divestment involves selling all shares in unethical companies. The idea was originally pioneered by the Quaker church in their opposition to the practice of slavery. Since then, multiple divestment campaigns have occurred; including, notably, a large campaign targeted at South Africa during the Apartheid era.

The modern, global, fossil fuel divestment campaign launched in the fall of 2012; to date hundreds of universities, municipalities, religious institutions, and foundations have divested.1 It has grown faster than any other divestment campaign in history.2

Primary groups driving the fossil fuel divestment campaign can be found at 350.org and gofossilfree.org.

Does divestment work?

The fossil fuel divestment campaign has undoubtedly brought the issue of climate change to the fore, on an unprecedented scale and astonishingly swiftly. Divestment does not directly affect companies’ share prices or their ability to attract investment because the shares are simply sold, at the price they are worth, to different shareholders and companies who don’t share divesters’ ethical concerns.3

If divestment happens on a large enough scale, however, it can affect companies’ public image and exert pressure on governments to enact legislation. An influential meta-analysis from Oxford concluded: “In almost every divestment campaign we reviewed from adult services to Darfur, from tobacco to South Africa, divestment campaigns were successful in lobbying for restrictive legislation affecting stigmatised firms”.4


1. http://gofossilfree.org/commitments/
2. Ansar, Atif, Ben Caldecott, and James Tilbury. 2013. “Stranded Assets and the Fossil Fuel Divestment Campaign: What Does Divestment Mean for the Valuation of Fossil Fuel Assets?” Smith School of Enterprise and the Environment, University of Oxford.
3. This is different from changing banks, which does actually increase or decrease the amount of money the bank has to invest.
4. Ansar et al., pg. 14